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tv   Street Smart with Trish Regan and Adam Johnson  Bloomberg  March 25, 2014 3:00pm-5:01pm EDT

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>> consumers are confident and markets are as well. consumer confidence hits a six-year high. street smart starts now. welcome to the most important hour of the session. 15 minutes to go until the closing bell. coming up, the data collection deal for the nsa. willrogers from michigan
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come on and talk about that. it is a bipartisan nsa bill and we will fill you in on all the details, what exactly they're listening to and what they are not. about also going to talk ,hat is going on in the ukraine what he is telling vladimir putin, backup or it will cost you. we will tell you all about what is going on in that breaking malaysian flight 370, what we have got there. i want to go over to julie. >> let's start with carnival, the cruise line company that suffered from a lot of corporations lows. the company beat estimates and narrowed its forecast for the year and brought down the top and. it will seesays
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higher costs and lower ticket prices fear that we'll be eating into its bottom line and the stock today. walgreen actually missed forecast.or share the numbers reported for last quarter. set in the second half of the --r it would be closing boots are going to be higher than anticipated. that seems to be pushing the shares higher. american apparel, some of the best-known penny stocks out there in terms of a consumer brand, is raising money through a stock sale, and it is facing a cast -- cash crunch. yearning considerably last from 100 million dollars to 30 million dollars the prior year. the shares are plunging today. >> thank you. we will talk about all of that stuff in the roundup as well. president obama continues his european tour with the second
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day of the european summit. russia is dominating the discussion in the first cincinnati station, russian president vladimir putin has urged to step back or face the consequences. >> we are also concerned about further encroachment by russia to the ukraine. what thenounced and european council announces that we were consulting and putting in place the framework, the all , ofhe architecture additional costs, should russia take this next step. suspendingr the g7, participation of russia, that is where the change comes in. effortsse diplomatic de-escalate the crisis? joining me now to discuss that, our white house correspondent
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and senior eurasian analyst. let me start with you and ask, is there anything to de-escalate? what exactly is escalated right now? he has annexed crimea. that is done. what is next -- what is left? >> it is pretty much done as far as crimea is concerned. each side has given a symbolic gesture. russia has symbolically -- a region already a part to begin with. the west has given symbolic sanction. we are still at symbolic movement from russia and from the rest -- the west. standoff at this time. class with you think? is there anything behind this big stressful talk and huge statements coming out or can we all chill at this point?
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>> the sanctions are really measured and are a lot more for effect. friend and business and political associates of president clinton. the u.s. and europe are trying to make the case they are already beginning to have some impact. the benchmark index is down 12% this year. if europempact comes decides it is worthwhile to trigger some of the sector sanctions on the energy sector on weapons. the problem is that will have an on the western economy. >> beyond punishment and making it feel bad he did it, how do ?ou measure the impact president putin said he would not go further in the ukraine and has already taken over crimea. step back from what? when they want to de-escalate a situation, how does he do yes go a something -- that is over?
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it is over.ot think are waiting for more signs, not just militarily but rhetorically as well. it is a matter of time. putinid not see president broadcasting this before hand and then it was all a sudden insight. from the white house's perspective and europe's perspective, there is a matter of trust and timing. they do not think there was a chance of salvaging this in time . violente forecast the demonstrations where the democratically elected prime minister was forcibly ousted. violent episodes beget other violent episodes. one was kind of sanctioned by the u.s. while the other has been completely attacked. do you see happening
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forward? is vladimir putin going forward to try taking other countries? >> the problem with anymore military moves is that it is difficult with the ukraine. it is a large country. with logistics, they are something russia knows very well. russia has fought wars in the country before. russia at this time does not see it as very viable to go into the eastern ukraine and escalate the ukraine militarily. important question right now is what is going to happen with the new ukrainian government. the government right now has two months until election. russia wants to know if the new government can be cohesive integratemove and further in the last or can it remain paralyzed? live with a ukrainian government that wants to further integrate to the west. right now, instead of military
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moves, russia is speaking about politics. concern vladimir putin is going to go further? for example, in belarus, lithuania, moldova, which we heard a lot of this old, cold war hawks talk about it. any concern from the white house in that sense? >> there is some concern. i was with vice president biden the leadersd articulated to him they were not concerned about their home state of play. beyond the immediate concerns that are important, are some gameof bigger picture big stuff. what does russia do vis-à-vis iran and syria? the white house has all of these compounded and conflicting interests all in play.
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president obama feels like he has gotten himself into a position where the u.s. best play is to galvanize the international community and remain flexible. class a great point. we have other problem areas around the globe. it is definitely not going to be now. how do you see those things playing out? syria or iran? >> russia has a lot of tools in its toolbox. russia is willing to ramp up tensions in the problematic areas for the united states if the united states and other western powers continue to further integrate inside of the ukraine. everything comes back to the ukraine in question. other key places moscow is watching is georgia, the other two countries the european union is looking to integrate with.
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,f the west makes further steps russia will have no problem using its other tools in the toolbox. i am talking about syria, iran, what you are saying is the white house thinks it can use it in a sense to its advantage by galvanizing support because of what russia has done in crimea from our allies, for example the rest in nato, europe, etc.. class going forward, what the u.s. and the president is hoping is that they can use this to prod some of the countries toward energy independence in russia rather than getting the cheaper deal in energy. that is trying to make lemonade out of lemons. the u.s. would probably not want to deal with this at all. >> a lot of it has to do again with oil and energy. been talking so much
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about what if we released our petroleum reserves, which would only be a short time fix. what if we could convince saudi yetia -- what if we could europe to rely on natural gas. is that a big push? >> it is a push on many levels. you will see president obama in saudi arabia in several days. that has entered the picture now in terms of ukraine and russia. states andthe united talk about domestic oil production. the argument for this up until now has been that this is about u.s. independence. now we are talking about whether .e can play a role it is really complicated and has turned around a lot of the narrative the white house thought it would pursue.
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>> what about vladimir putin? he concerned about selling his fuel energy in keeping the price up or feels like hitting the mattress right now? >> our energy prices are key here. the problem is with tensions --r the ukraine, russia has the investments and capital flights out of russia is massive at this moment. $70 billion left russia in just the first quarter. russia can handle this right now. ande were 140 billion russia was not able to handle that capital flight because oil flights -- oil prices were around $30 per barrel -- if the oil price falls, the
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price will contract significantly. you.ank i appreciate your time and input on this fascinating story. today, street smart will talk about a resolution. the house intelligence committee top democratic and republican representatives on the bipartisan bill to bring an end to nsa data collection as we know it or as we do not. thus, the former nsa and cia director tells us what he thinks of the intelligence committee deal coming up ahead. ♪
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story.onto our big a data collection deal, new legislation unveiled today aims to put an end to the nsa's collection of phone records, e-mail, and internet data. president obama indicated he pass itte congress to
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quickly. the bipartisan bill, the top republican and democrat, committee chairman mike rogers -- thank you for joining us. confident the two of you are and i will last you first, how confident you are this will pass. >> i am getting more confident by the day. the administration is moving toward our position. we havee language worked out over the last nine months. i feel confident we will get -- this will be the rally point where people come together saying it ends the government holding the metadata phone records. that bothered a lot of people. and still has a way forward by calling into the united states. >> if i understand this correctly, the nsa will no longer collect bulk phone data, for example, they will have to
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have a reason and prove it to a need to collect data connected to one phone number or other phone numbers collected to that data. is that the case? >> yes. what we were really concerned the program we had, the metadata program and if they had, that it was a legal program and there was no evidence of any abuses but there was a perception to the public that they did not trust the program. it was important not only that we had the programs to protect us and our national security, but also that we had privacy and that we cared very much about that. mike and i worked together for the last my month -- nine months and came up with a plan that the government no longer holds bulk collections and that it will stay with phone companies where it is now. they have to hold their information for 18 months. this is what they do.
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we would basically have an administrative subpoena and test tove to pass a show there was a suspicion we needed to get the information. a terrorist calling from yemen in the united states, that would be a reasonable suspicion to check that out. the other issue, important as well, is that the court will we ask for after that information. request the information will still be collected. to make any way for me a phone call, send an e-mail, or use the internet, without someone collecting and keeping my personal information? >> absolutely. that will not happen. there is a ban on their for internet metadata, as well as phone metadata. it is very specific that is all banned.
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they're not getting americans e-mail metadata. they will not be getting phone metadata. the only way they get it is they have a number from a known terrorist overseas and they submit that to the court and get the information on that particular phone number. and that is it here if you are making a call or whatever, ordering a pizza, that will not be collected by the nsa. it was not collected before. we made it very clear. your phone company has the data today, it is just that nsa will not have the access to it. >> i'm glad you raised the issue . other national media outlets raise the same thing. in order for them to represent you, and they will are your carrier, they are not collecting it for us. the information has always been aere and we are getting
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subpoena on an individual case and saying, we need the numbers. nobody's name, address, or anything. if it looks like they are relevant, then the fbi will look farther and will go to the courts if they need to do more. it is selected by the company. >> this is the biggest misperception we face, that the andwas somehow recording listening to your cell phones. they are collecting all of your e-mails. no. it is not happening. it is illegal. we put it very clearly in the law that that cannot happen. this is really important. what we have done now, the government before we take all of the metadata from phone companies, lock it away and have a whole series of protections in order for them to search the database. the nsa will not get that information. we will only have the
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information from a call overseas . they go to the phone companies and say, we want to know who this number is talking to. he goes that test, then to the fbi for further investigation. ofre are multiple layers percussion built into this. >> my next concern is that verizon and google keep my information for so long. >> they already do that. >> i would love it if they would change that. want them tonot have it, you do not have to use them to make a phone call. >> i got it. someone, no matter what, will keep my data for 18 months. that will not change. >> you are paying verizon or at&t to have your data because you want to use their services to make a phone call. these are business records. metadata. it is not content. none of that. shey have had that since phone were invented. it has been a criminal statute
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in the country for five decades. pen registere or information. it is not unusual at all in any way. those records are required by the fcc to make sure you're being appropriately billed and it toforcement is using catch gangsters and pornographers and drug dealers. is only thing happening now the nsa is able to track a foreign number coming in with a legal instrument. that is it. it is not anything to be excited about. >> how closely does this jive with what the president wants? he wants to pass something quickly. is your bill and his thinking, are those aligned? >> yes, we are close. not 100%. the and i met with leadership of the white house yesterday. we realized we need to protect the privacy and have a perception to the public that the nsa is protecting them.
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we know we have to protect ourselves from terrorist attacks. we knew it happened in 9/11. we look at the unsophisticated bombers in massachusetts who are totally unsophisticated. al qaeda is very sophisticated. they will attack us or our allies every day if they could. issue themajor government will no longer have collection. that is key and it is the major issue in the legislation. quest that is what people were concerned about and we addressed it. >> absolutely. issue forllection sure was the meat of the issue. the whole spying scandal is growing because of diane feinstein's regulations and what the cia's doing that. anyway to address that? >> that is a whole separate issue. they have internal reviews and other things. that has got to get worked out. that was an isolated incident.
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this is not a pattern we found in all of our oversight of the cia and their operations around the world in dangerous places. that is a different issue. we dealt with the 215 metadata question program in the bill and that caused the most angst, not because they did something wrong but -- but because they said it could be abused. was though the program legal and overseen and had 17 judges and 37 different legal opinions, we decided in order to rebuild confidence that we would find a way for this to work and at least have americans relieved that the nsa, that was their concern, was holding this metadata from the phone calls. we worked our way through it and it is very specific to the issue. class i understand. is catch-22 to all of this that covert operations are just
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that. that is what you gentlemen oversee. i realize you have to operate in a legal framework. that is what you are trying to structure. how difficult is it to do that when you are dealing with covert operation? established since i became a chairman, we put back into place regular oversight function of covert action. it is the most sensitive work done and it needs a lot of scrutiny and oversight. they welcome it and want to follow the law. this is not a tug between the cia and the intelligence agencies and what we do. we have full access to the programs. we oversee the programs. we asked them a lot of questions and make sure they comply with the law. very seriously. there are 20 of us who have these types of clearances who can do this work. truly the third party looking over the government's shoulder, to make sure it complies with the law.
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quest of course. we appreciate it. we have to run to a break. thank you for joining us. a quick break and we will come back and talk more about this. ♪
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>> the first major step in regulating nsa after the edward snowden regulations, we are .oined by michael hayden he was the director of the national security agency during the 9/11 terrorist attack and he then led the central intelligence agency from 2006 two 2009. a real honor to speak with you today. let me ask you what you think of the deal we are seeing come to fruition in the house? class it is not a bad deal.
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it is one i would be comfortable with. mike rogers suggested it would be 80% dilution. it is done to make people more comfortable and not to fundamentally change the nsa posses ability to protect the nation. goingomfortable with this forward. i think the agency will as well. class i have always wondered. as an american, you have got to balance individual liberty on the one hand with, on the other hand, total security. theel like the framers of constitution would have probably been in more favor of a shift toward individual liberty whereas people in the cia and congress today are in more favor of security. what do you think? make the time, you have to -- the decision. the fourth amendment talks about protecting us against unreasonable search -- search
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and seizure. what is reasonable is based on the circumstances at the time. at times of national safety and comfort, not much would be reasonable. 3000 dead americans due to a terrorist attack, you know, the law might change. >> that is what we had with the patriot act. you think we have an 80% solution for the nsa. let me ask you quickly because you ran the cia as well. i know john running it now denies his agency has acted wrongly, but diane feinstein is one of the big defenders of the nsa bulk data collection and has now said there has been a breach of powers and the cia has been researching committee staffers, computers, looking into them, and how do you feel about that issue?
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what is your take on it? anmy take is that this is absolute no-win situation. it is no win for the week. it is no win for oversight. everyone needs to take a deep breath and step back, use a little less dramatic language and let's figure out a way to go forward. when you say the agency spied on the staff, i think we will find the high water mark might be the agency posses information-technology folks check the computers to see how the staffers got a document and the caa believes they did not give to them. that may make people upset, but that is a little bit different than saying there was continuous spying by the agency. >> i think it is weird when people accuse the cia of spying. that is their job. i was talking with the
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congressman as well. isn't it difficult to oversee covert operation? is that not a bit of an oxymoron? >> it is not. let's be candid with you and your viewers. this cia breaks a lot of laws, just not american laws. that is the distinction. there is a dylan song, you have to be honest when working outside the law. operatingia is outside of other people's law, they have to be absolutely honest internally here in the united states. >> it is classic. i wonder how often cia directors and nsa directors quote dylan. long -- i understand after the patriotacks of act in this kind of oversight, a lot of people would deem necessary, but how long? it seems the terrorism is here to stay.
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is this kind of surveillance here tuesday? >> if you had asked me that question two years ago, i probably would have been leaning more than i am today, that we are safe enough now that we at least want to consider pulling back some of the things we put in place after 9/11. totality of circumstances. we are in no way in the circumstances we were in in 2001, i think we're marching left say -- less safe today than we were two years ago. these low threshold attacks we see them conducting. this is going to be a tough problem for us. when do go back to normal? the question is, this may be normal. >> got it. thank you for joining us. theer head of the nsa and cia. a quick break. when we come back, retail, one
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of the worst forming sectors this year. how can companies turn things around? .e will ask that question greg will be gracing us with his next hour.r the america posses top-selling car, the ford f1 50. i will take you inside of manufacturing plant for the making of my own truck. check it out later. in street smart. ♪
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>> for more than three decades, the ford f1 50 has been the top selling vehicle. i went all the way to michigan
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to see how the iconic truck gets assembled and i got to watch my own new truck roll off the line. check it out. this is the root. and historic ford assembly plant in michigan. i am here to live out every gearhead fantasy, seeing my new souped-up customize raptor roll off the line. watchadded onus, i will how they build every f1 50, the top-selling vehicle in america. bought a raptor. how many people does it take to build one and how often? >> about 1000 people, about 20 hours. >> how many trucks roll in here on a daily basis? about 7000 per week.
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>> most robots work at the start of the line, molding steel into a 7000 pound truck from the bottom up. now in the case of my truck, that is lacked on black. more than half the people on the line worked in final assembly. they do the integral work here in stalling the gut. for a raptor, getting an after -- extra-large engine. yourast stop before standard f1 50 is quality control. others, they go for modification or the mod center. they put on the graphic -- packages that differentiate visually and help them stand out. $2000 in handmade decals. after getting a firsthand look at the manufacturing product -- process, it was time for the real reason i flew out to michigan to see my very own f1
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50. is that it? i cannot believe it. the ceo delivered my car to me. unbelievable. i cannot believe it. i did not expect this. it is amazing. >> you picked a really nice car. >> thank you all very much. [applause] ♪ >> so, it totally rules. i have been driving it all weekend. , want to bring in our a guest founder of tiny toy car, providing advertising content to automakers. this is the biggest toy car i could possibly find. what do you think? i have been having a blast driving this. profit50 is the absolute
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bomb. they make so much money with that truck. >> is a monster, an absolute monster. so much money off of it and they sell so much of them it will be consistent way the prophet grabber for the company. >> a lot of people who do not cover cars do not realize car makers will not tell us what their margins are. they will not tell analysts what they are. they will let you guess him and tell you if you're in the ballpark. >> if they were to do that, you could quickly figure out whether profits will look like for the year. they are closely guarded secrets as to how much money they are making off of each feature and each of the options on the trucks. because of how well or how many options provided on those trucks, you have got an opportunity to start at a low price and get up in the lower -- in the 40's and 50,000. >> you could get one for 29 or $30,000 when you buy a raptor and completely loaded with everything, it gets almost 260, or maybe a little bit above it.
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these vehicles, they do not have a lot of the many more. with thegreat seller yukon and the suburban but everyone else has dived out of the market. >> there are a lot of reasons. ford realized going after enthusiast market is extraordinarily important. that means going after the built in fan base that could sort of act as a third-party validator for the brand. something you were mentioning earlier is there was also a manufacturing issue for why they may not be able to provide that. >> nobody else builds a raptor according to -- they just do not have reduction lines wide enough. there is such a big production line, maybe an ode to henry ford, who invented the thing, that they could make this and nobody else has a wide enough line. everybody else makes some. i wonder why ford, for example, they are not doing a new
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exposition. they do not have a sweet new navigator. gm is cleaning up that market. >> they might be, but as people are starting to realize they could get smaller crossovers that provide the same level of utilities they are getting out of the larger ones, where they are finding they do not need that level of utility provided, they are starting to downgrade and say, we could go for something smaller. >> totally unrelated, we had travis on yesterday. i accused him of being canadian, which was not nice. you pray -- you played a prank on him. he did not believe the jeff gordon pepsi ad was real, when atdon drives around the guy the car dealership. how did you do this? how did you get travis to show up and get in the car with jeff gordon? >> we found it is pretty easy to get him excited about certain vehicles. a new corvette was something he was excited about getting the
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ability to drive. he decided he would come out and get a chance to drive it and that was all we needed to get him into the gag. the prank. >> if anybody has a chance, go online and check this out. jeff gordon cranking. we love having him on the show. we love having you as well. thank you for your time. great work. coming up, turn around king and the former hostess ceo ha l struggling retailers out of financial ruin. that is coming up next right here. ♪
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the retail sector is in need of a makeover, it is one of the worst performing sectors of the year. companies are looking for all different ways to give themselves a boost. walgreens is one of many retailers closing stores. j.crew is contemplating going
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public again. american apparel is selling off stock to pay its debt. because we're with the man, it is all ok because he knows a thing or two about turning a company around. he will give a little bit of advice. the former ceo and chairman of hostess is here. got a lot of experience in this sector. we come to ask you, who you think is doing it right and who is doing it wrong. in retail.y this man >> rightly so. from a stock, investment standpoint, in the retail sector more than almost any other, you have to focus on the ceo. retail is about three things. relevance, the value proposition, and merchandise. done it everywhere he has been. he has done turnarounds everywhere he has gone, on those principles.
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he is at j.crew now and he knocks it out of the park because he gets those things. terry at macy's is another. >> i wondered about that. being in new york, bloomingdale's is my go to the store. around theame country? do people go to macy's everywhere when they need anything? >> yes. they have been eating their lunch for a couple of years. a lot of jcpenney wells and sears and others close our macy's ability to go out and capture that share of wallet in addition to the upper share and the hiring competitors. if you look at retail, it is will -- the one sector that has the most chapter 33's. filing bankruptcy three times. historically, it is the way retailers might look at restructuring themselves in a bankruptcy. the historical way would be a four wall cash flow. forget overhead and the mothership. what does each store throw off theut -- in cash flow? if
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ones are negative at store level, you shut those and shrink your footprint down in size and emerge from bankruptcy, but you have not altered in any significant way your relevance, your product, your value proposition. >> this is what we see at walgreens, jcpenney, radioshack. >> it is. it is also -- also due to other factors as well. we are over stored in terms of apparel and retail in general. that the fed jumped the gun on a couple of months ago, it is not there. we will not have housing rebound until the job market actually gets fixed. you cannot look at the unemployment rate. you have got to look at underemployment entities other factors. if you cannot drive demand, we are over stored for the level of demand. >> who knew. radioshack, they had that many stores? we will keep you around for the
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hour. we will take a quick break and come back with the top 10. stay with us here. ♪
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♪ >> we are heading into the close. i will kick it off with number 10, ebay. the e-commerce company did not some newarl icahn filing. not really a surprise. carl icahn took a stake in january and has been pushing for a spinoff of its paypal unit ofposed last week, an ipo the online payments company with everybody works there thinking he is super annoying.
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number nine, up one percent today. elon musk's solar panel company announced the largest aggregation facility today, receiving $250 million in financing by bankamerica as the sole structuring unit. about $4 billion to fund the like projects. fallingight is twitter 1.5% today despite the fact twitter got two upgrades today. deutsche bank said investors should buy head of volatility and the recent weakness is perhaps a buying opportunity. class telephone rising one percent. the house intelligence committee proposed earlier legislation that would end the nsa's phone records old spying program. it would require carriers like at&t and verizon to keep the data and only when the government issued a directive with a handed over. they are still keeping it. --ss i am trying to get it get over how old-fashioned you are by calling telephone still.
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>> a lot of traders call it telephone. even the young ones. and i am old. hitting a new 52-week high. almost 11%. the company's earnings jumped 15% in the second quarter, eating estimates. a decrease in costs and expenses were reported. upss number five, google is slightly today. the company announced a partnership with the group that owns ray-ban sunglasses. it is going to design and develop and distribute a new do not perhaps like the way they look. they will now team up with the high-tech glasses -- they are making an attempt. >> it is not just how they look. what they do. >> what they do is my problem. i am the guy who lives to solve things with words.
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i am not a fighter. i am a lover. when i see someone wearing those, i want to punch them in the face. to be amake you want fighter. >> you will look cool and say, i want to wear those. >> they are secretly taking pictures of me. between is an interface you and the other person. >> think about all the extended utilities and i love to ski. you can have classes that help you ski. >> i have ski goggles that do that. >> you like to kill birds. imagine if it helps you hunt. >> i had not thought about that. >> you are the same as i am. everyone you would see with that ear clipping on, you just want to smack it out of their air. >> yes, i do. but they are coming up with a way to try to cover it up. i'm not sure if it will work or not. quick someday, greg, you and i are going to be called old-fashioned. >> i already am.
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>> general motors is down four percent. facing issues over ignitions switches. gm said it would not comment specifically on the suit or pending litigation. [closing bell] and i know why she wants to get these done by the trade of day, because producers are yelling at me to hurry up. walgreens said it synergies with purchase of alliance switzer are going better than expected and will close stores in the second half of the year. first-quarter earnings rose more than eight percent, beating analyst estimates. >> number one is carnival, falling the most in the s&p.
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it's down now five percent. the cruise line announced first-quarter earnings in line with estimates, but disappointing profit forecast for the year. carnival, which has grappled with a lot of pr disasters in recent years has managed to beat eps estimate in each of the last seven quarters. underpromise, over deliver. maybe analysts should take note. the get additional context to today's market news with julie hyman. >> there was not a lot of context today. data out this morning that was sort of mixed. consumer confidence was better. sales were worse. it kind of mixed in the session and then it kind of turned around. not a lot of driving force around the rally that we saw by the end of the day. >> no, but you did see a bit of a pick back up in health-care stocks. carer resident health reporter olivia chimes in here. consumer confidence is probably what we are going to pin the
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gains on. but let's you that. >> lives do that and we will move onto our roundup now. the tracking -- the story is tracking ahead of tomorrow's open. by the way, boy genius is joining us, jonathan geller. and our guest host, greg rayburn, who also does not wear google blast. a story about jpmorgan. the co-ceo mike have a nicely cavanaugh iske leaving the company after more than two decades. he will become co-chief officer of carlyle group. cavanaugh was seen as a potential successor to diamond, who has told people he wants to remain ceo for another five years. that is, according to people with direct knowledge of the matter. how else would with no? -- how else would we know? >> it is another person that is in his inner circle that is
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leaving the company. but it makes a lot of sense. he will get a much bigger payday at the end of the day. >> and he doesn't have to wait another five years to sit around jamie dimon. he's 48. >> to me, the whole thing sounded like succession when i heard the initial story. to julie's point, it is probably not as much about a as it is about time. pay as itmuch about is time. jamie dimon will not go anywhere until he probably wants to go somewhere. unless jpmorgan takes a weird turn. >> and he is picking off left and right to be blue would succeed him. right? people who would succeed him, right? >> i read an internal memo and it was pretty nice. >> i'm sure it's nice, because this guy is bleeding. >> a good ceo wants great people around him. sometimes the hardest thing you have to do in business to be successful is to hold onto those
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people. they want to make money, continue to progress, more responsibility, and they wanted it in a time horizon that will work for them. i think that one hard part of jamie's job is to keep people in as opposed to wanting to go around and shoot them out. >> i think that alan mulally and bill ford, they have like three or four people or for people who could take over that company and run it well. >> that is very good news for , mr. pinto. >> hopefully, no car association, mr. pinto. joining shanghai and beijing and in the fight against smog and traffic. government said on the city's official website that it is going to do this. china is the world's largest automaker and growing fast. five chinese cities have now put curbs on sales so far.
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>> is this going to make a difference? >> not a good idea. >> part of the idea is that there are already -- part of the problem is that there are already so many cars on the road. do you put the genie back in the bottle? will be up there reduction of electric cars in china? >> i don't think that is what it is about. this is a primitive solution to a modern problem. here is what happened in a country that is formerly a communist country and stolen bike a communist party. you'd -- and still run by a communist party. you don't think about market solutions. why not just tripling the prices of these things or taxing the hell out of them? >> how much of their problem, pollution life, is due to cars? pollutionst of the there is industrial. when you add industrial to water to waste to all of these other forms of pollution that they it is not only
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ridiculous move and not likely to succeed, but attacking a small problem. >> these are their russian sanctions, basically. did this two weeks ago. harris said only cars with even-numbered plates could come in. >> that was not about sales, but how many cars could actually drive on a given day. >> and it was because the air had become so bad. >> before we move on, i want the viewers to know something. france is not officially a communist country, just so you know. >> it is not even unofficially communist. htc is out with new version of its one smartphone. today, it was introduced here in new york. the company is hoping the device will be able to restore it to profitability. a five inch high death screen, qualcomm snapdragon 801 processor, a microsoft processor
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d slot. the last time they reduced a new version of this in february, he did not do anything to stem its decline. with actually happen to have one here with us. >> and a genius. >> he's no longer a boy. >> jonathan geller. >> i have to ask, these phones get bigger and bigger and more popular. does this fit in your pocket? >> this phone is too big for me personally to use. it is actually bigger than the htc one they came out with last year. everything they've done with the phone is a lot better. the cases better. it is more premium. the camera is better, the screen is better. the processor is better. the audio is better. theything is improved and just made it bigger. >> it is $199 on contract come of the same as the iphone 5 as. is it worth it? >> for me, no. but it is a great phone.
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>> if you don't want to go with the samsung galaxy s5, i think it is a great phone. >> you think the galaxy is better? >> no, i think this is better. if you don't want to go with iphone and you don't want samsung, this is the phone to get. >> will it be enough to turn around their fortune? >> the problem is that there have been a lot of great products out there, including the windows phone from nokia. but there is no marketing behind it. , because major issue it's a great product that most people will probably not even discover or find out about. >> it is bigger than my iphone? >> yeah. >> this is the biggest possible iphone that you could possibly ever have. >> but iphone just announced yesterday a new five point something inch screen. i wanted to ask you about that because i was surprised. it almost sounds like a "me, too," rollout.
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>> there are rumors that they will come out with a larger phone. i'm definitely sure they will. we don't know the screen size yet, or if they might even come up with two larger models. note has always been about making a bigger phone just to make a bigger phone. i would expect to see something in that your phone that warrants them putting in a bigger screen, whether it is new technology, new sensors, amazing battery life. there will be some extra that will justify the larger screen. >> maybe it will be able to start a truck. something. >> shirt. -- sure. >> everyone's favorite story today, the brooklyn nets are becoming russian. russian billionaire owner of the brooklyn nets announced yesterday to relocate the company to russia. the nba told the new york times
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yesterday. and the team's parent company is saying "this is a long process which may or may not come to fruition. of course, no steps in this direction would be taken or could be taken without the full knowledge and approval of the nba." to of team owners would have agree on this. a lot of people are saying this is unlikely, but this is a reaction to poker off trying to trying to tell them to put their assets in russia. >> would russia be the domicile, but they would still be the brooklyn nets? you move your assets to bermuda, but the company still operates the united states, for example. >> so paul allen is not going to moscow. he wants to be involved in
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the political process. >> which country? >> russia. >> gotcha. >> i always see him hanging around brooklyn, so i don't know. >> have you ever seen him at a net gain? >> yes. and i've eaten chili in his basement. >> it is very unlikely. 75% of nba owners would have to approve it and given the current sanctions environment, it's unlikely. >> but he does have an issue with what is going on. >> his stake in the berkeley team was about $200 million. he can't afford to lose it. >> but who's going to take it? does jay-z bite off of them? -- buy it off of him? it's been a pleasure. i cannot understate -- i cannot overstate that. but you are all leaving, except for greg. coming up, what the company has
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to say about the future of broadcast media right here on street smart. foronsumers are now looking more. whether it comes from ariel, netflix, or a variety of other online sources, they want online media. ♪
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>> arguably the most followed court battle in media right now, is before the supreme court and areas excited to present a brief on wednesday. with thely sat down company's ceo in new hampshire. >> this is one of the most amazing stories in media right now.
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you're right. they are currently operating in 11 cities across the country. they would be in 13 cities, except they had to seize operations in denver and salt lake city because of lower court rulings. now it is all the way to the supreme court. and the ceo is not too worried about it. here is an example. >> to be clear, if you were not to be successful at the supreme court level, is there a plan b for aereo? >> no, there is no plan. we believe in our merit. and not just believe in the merits, we do think it is the right thing. progress is important. the mission of this company was to try to create an open platform, try to wedge the system open in that sense. and if we don't succeed in that, despite our best efforts and good law on our side and the merits of our case, it would be a tragedy. but it is what it is. the supreme court showdown
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gets going in about a months time. they want to be in more than 20 cities by the end of the year. we will see. >> surely, the american people, at least those who are not running cable networks, agree with them. not,e supreme court does -- or if the supreme court does, why don't the broadcasters just move their networks over to cable channels of they cannot rebroadcast them on area oh -- aereo? >> a talk about it. they are not shy about bringing that up as a threat. can you, a broadcast network, moved to cable? if there are still millions of people that are watching you on antennas, which there are in this country. one of the issues that gets brought up with aereo is whether or not the technology can be easily replicated. there are many pay pre-the -- pay-tv providers that have been
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hinting that they could do it, too. >> we have invested a terminus amount of money, resources. this is a very complicated -- have invested a tremendous amount of money, resources. this is a very complicated resource. these are not that straightforward problems to solve. >> as you highlighted where we did that interviewed, a still -- a facility in new hampshire. they have a bunch of facilities, but that is one place where this technology comes together. we will have that story tomorrow on bloomberg tv. >> it's great to have there are miter that someone still thinks this is a free country. mary diller is involved in is how and why? >> diller likes technology. he has made a big heart of this portion -- his fortune because of the his bets on the future of thenology and the future of
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internet. after his career in the world of film and television, we've asked him many times about his investment in this business. it sounds like sometimes there could be awkward conversations between his friend than the subject. but he is somebody from the early days was a blip -- was a big believer in what the possibly of straining could be. to add him as a character in the story highlights the friction between traditional broadcasting and the way we want to watch tv going forward. of the morene recent examples of disruptive technology going against established competitors. if you look at seattle and the issue with huber and the other carriers, tesla in in new jersey. binary in terms of outcome for them. could this not get solved by royalties? could this not get solved in a
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number of other ways with the players involved? or are they really looking at this as binary in terms of outcome? would beclear, aereo willing to partner with the broadcasters and find a way to generate advertising revenue. but aereo is not an the position financially, nor have they shown any willingness to pay the broadcasters the way to cable providers pay the broadcasters for their channels. this is the situation and we will see how it plays out. >> it's a tough argument. >> it's a free country versus an old school, old boys rooted bureaucracy. have more "street smart" after this break. ♪
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>> we are just seven months out from the next election and two years and change from the next presidential election. democratic frontrunners for the demo -- for the nomination are hillard clinton and vice president joe biden. would winoll, clinton elections were held today. biden took about 12% of this poll that we are talking about here. but it is still a possibility that people are going to start more and more to talk about. does vice president biden even want the nomination? >> i think that is a fair question. he talks about it and has talked a little bit about it publicly and he talks first and foremost about being vice president and supporting this administration. and at a time like this with
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russian troops in eastern europe for the first time in decades, to know talk -- you know, have a vice president who was first elected in 1972, chaired the foreign relations committee and was brought up and schooled in this cold war european moment, i think he's more focused on that now than ever. he will not decide anything about a presidential run until next summer. but that is believable. both sides of the aisle believe it when joe biden says it because he says what he's thinking. that is why he has so many of these gaffes is that he just says it. >> it's a shame that in politics the truth becomes gaffes. that authenticity is part of what endeared him to democratic voters. but also to independent voters. he does really well as a surrogate in these midterm elections. he did in 2010 in states that democrats need to do well in,
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with union voters, catholic voters, middle-class registered independent suburban moms. -- extremelystring well with those communities. believes hillary clinton's apparatus when she says she does not want to run because she has this apparatus preparing a run when they say that. what is it like when she gets the nomination? , andis decision to run i've been at six democratic conventions. at such a personal decision and the emotional decision. .> it's her raison d'être >> it may well be. she is not 35 or 40 years old. she's already been secretary of state. that was a hard job with a lot of travel. i think the apparatus that you see, though, is not hers. it is a semi-orbit around her. >> ok, natch, nudge, wink, wink. we will take a quick break.
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talkwe come back, we will about the candy crush ipo. seriously, it's a lot of money for a reticular is past time. -- ridiculous pastime. ♪
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likes if you find yourself in public, chances are you can catch somebody on his smartphone playing candy crush. daily -- 97 97 million daily users. it will look to ride its success into tomorrow's expected ipo. however, will it falter as a publicly traded company with 78% of its sales coming from a single game that surely gets old fast? by casey ged managing director and tnt desk analyst.
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let's talk about candy crush. so ridiculous.s >> have you played it? >> yes, i have played it. and i don't hate it. i could play for five minutes, but i wouldn't want to spend much more time on it than that. people play it a lot. allhey played a lot and over the world. north america only makes up maybe 56% of the revenues forared to closer to 70% zynga, a comparable company at the time of their ipo. they are becoming diversified in a lot of ways. nonetheless, it's hard not to draw some parallels. certainly, king has had a little more success on mobile, which makes it more attractive in some ways. on the other hand, there is a lot more concentration. in one game is something like 76%. >> who pays money for this cap i
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played and it was pretty much free. -- who pays money for this? i played and it was pretty much for free. >> you pay for all sorts of things. they posted about $2 billion last year and they are profitable. they get them hooked i getting them to play more rounds and get two different regulars. >> kind of like cigarette sellers. >> i guess. >> it is about addiction, i guess. >> is there a breakdown of what age groups they get the money from? >> not that i've seen. >> i only ask that because i have a 10-year-old son and he starts talking to me about wanting to buy a lifetime thing on this game and i'm just trying to say, you may not play that for your lifetime. but i could see that with kids. the kids spend a lot of money to buy those extra things in the game. i would love to see that breakdown. is peoplea feeling it
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that are even older than me and you, greg, that are spending on this. >> i'm way older than you. >> what do investors, professional investors think about buying into an ipo? do they still want to raise something like $500 million? >> 533 million dollars. >> what do they think about buying into an ipo that is only basically doing one thing? if it's the next gruel -- if it's the next google, sell it to me. but using it, no tanks. >> it is worrisome to concentrate on the one game, but just lookinghand, at the financial metrics at first, it is priced at a discount to the market, priced at a discount to other social gaming companies. i would look at trailing rather than forward-looking. these companies have a history that is so hard to predict going forward.
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but even on a multiple that is less than half the multiple for the broader internet space. it would not take much of a new hit game to drive the stock meaningfully higher. that said, we have a lot of dedicated services. you can lock -- you can watch every game that they launched day today. companyrd to bet on a that is this concentrated in one game. but the global diversification make is -- makes it attractive. >> these one-hit wonders don't come out with other hits, though. thing you had farmville. do people placed -- still play that cap up -- do people still play that? >> people defected from farmville to candy crush. >> i got farmville was even more ridiculous than candy crush. and they still have not come up with a better game than angry
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birds. >> no, and they have stayed private for that reason. that game is owned by rodeo. king has gone out and corrected some of the mistakes that zynga has made in terms of showing a for gamingtfolio companies. >> look at the two-year zynga chart. painful. didn't want to bet on farmville, did you? star of the show attraction, one of them has doubled -- he had some interesting metrics showing user growth. one of the games had more than doubled from 9 million to 20 million. maybe we'll start to see more diversification there. but again, an incredible concentration at this point. >> i sincerely hope somebody comes up with something better than these games for mobile. mobile is the future, right? you try to give them -- you try
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to give your kids a big screen tv when you are moving into the house and they don't want it. >> i was stunned. they're on their tablets and mobile devices. >> and playing games a lot, i assume. >> yes, but they can do all of someone else on their laptop. that is just the way they get their information. to me, maybe i'm a little too old school, but it's hard for me to see how these types of ideas work in a market that is less frothy than the market we are in now. >> fortunately for them, were not in an un-frothy market. but there is a lot of debate about whether the market is frothy or not. $19 billion? >> that was a very defensive play. defensive by facebook. and weere a month ago said that you cannot extrapolate that to blackberry or anybody else's user base. it would not imply any kind of
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meaningful value. these types of ipos, to me, are a little scary. >> but it is good that at least the financials are good. they can make money. >> a lot of people are paying the money. makers of calle of duty a lot of money. but it's a much cooler game. pleasure to see you. it has been such an honor to have you on the program. >> we will talk trucks next time. monster truck now. i will show it to you later. up next, it's not just candy crush. there are plenty of addictive games out there. we will take a look at the highest grossing videogame in world history. plus, disney is cutting a check to buy youtube's top content creator, speaking of paying a lot of money for weird things. the term of the deal and why this is a media game changer.
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>> i'm julie hyman with breaking news on sotheby's and its thatnuing fight between company, the auction house, and dan loeb of third point capital. dan loeb has apparently filed suit against sotheby's regarding its adoption of a poison pill. he had tried to take his seven -- his 20% stake in the bees and sotheby's and hadn't succeeded because of the poison pill it adopted. and now is saying it was justified just for the reason it are seeingg now, we loeb trying to take a bigger stake in the company and take more control and make changes. loeb's third point is suing suingies over this -- is sotheby's over this issue and
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the rule is valid. and sotheby's is saying the rule is valid. for the seeingw -- the scene. we bring you disney, digging deep for a digital push. the company will shell out at least half $1 billion to purchase maker studios, the top channel on youtube. it has 380 million subscribers. and fromaul sweeney los angeles, jon erlichman. this is a big deal. because it's a billion dollars. a billion disney has
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dollars in last nights jeans. but it's just a youtube channel. i don't care how many subscribers it has. a billionyou pay dollars for a youtube channel? >> we know that our viewers, whether on an abc television network or cable networks, we know they are increasingly spending more time with online video, youtube primarily. we know the audience is going there. we know the advertising dollars are there. you have to have some chips on the table. they go out and buy arguably one of the most prolific short form video players on youtube. they put up $500 million and if they continue to grow, it could be upwards of $1 billion. >> talked me through this, jon erlichman. we've seen a similar purchase, i believe, from -- >> dreamworks. >> exactly, dreamworks. is everyone going to go out and buy some will weird youtube
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channel? >> used to go out and buy cable channels. now you go out and buy these networks that bring together all -- all thise youtube content. it's not like you have necessarily seeing everything become dreamworks content, quite the contrary. but you get access to this audience and you learn how that works. you lean on the guy who created it, who is now playing a larger role inside dreamworks, and you could think of this disney acquisition in the same way. there is a lot of r&d that is going to get worse decide -- get pushed aside. lets not try to make sense of the financials of this business, because they are not yet proven. but even on the marketing side, you said last night's genes. and about what disney will spend sending it from market to movie. they will market all sorts of
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things, or have the opportunity to market all sorts of disney properties indirectly or directly through something like maker. maybe there is an opportunity there. >> put the money aside, john, how key is this new medium? i feel like a modern guy. i facebook my friends. i have the twitter. i buy things on ebay. but i don't ever go on youtube and watch what they want to show me. i just google stuff that i want to see. earlier and he was telling you that his kids only want what is on their phone and tablet. thatt the kind of stuff you would get through what disney already has, disney channel, abc, whatever, you usually have to be a cable subscriber. paying somehow to ultimately get on your phone. if you are young and you don't necessarily want to pay for that, how are you getting stuff? chances are, a lot of the video
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you are looking at on your phone or tablet is coming from youtube. disney is aware of that math. this is a way to do that. cannot say yet if this was a good investment or a bad one. we know that disney has done a lot of acquisitions, and a lot of those type to new technology, specifically gaining and played forhave been a sore spot the company. but you either build it or you buy it, and we have seen dreamworks by a platform like this. now disney is. >> 300 80 million subscribers, i'm sure i'm one of them. they have 55 thousand channels. i subscribe to a bunch of channels, but i don't know what that means to me. i never go and look at things that i'm subscribed to. most people who are subscribers probably have no idea. >> right, and that illustrates the difference between the traditional linear broadcast television business where i watch abc or i'm watching an abc show right now as opposed to online video. i watch shows, not channels
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necessarily. i watch content. are billionhere channels across all the media, how do i aggregate enough --wers on any one particular >> are there literally, or did you make that up? >> i made that up. but there is a lot. how do i aggregate a bunch of viewers into one channel, one show such that i can get paid by advertisers? that is what disney is bringing to the table here. >> and maybe greg rayburn's kids have specific youtube channels that they know by name and by brand and they purposely watch. >> that is what youtube is. it is $6 billion of advertising revenue that google has disclosed. that is growing dramatically. producedrofessionally programming. this is not cap playing ping-pong. this is programming that is professionally produced and it is drawing eyeballs.
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>> john, you need to get a reporter that is like 12. get a 12-year-old correspondent and then maybe it could be helpful. >> yeah, we could do that, or we could just are wrapping. that is one of the big stories through maker, the epic rap battles through history. where they will have michael jordan or somebody playing him wrapping, like with mohammed ali. videos get the millions and millions of views. >> if you wrap -- rap, i will clicked on that. thanks for joining us. let the games begin. we got five top apps that are fending off angry birds and cashing in. ♪
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>> in our last segment, we talked so much that we actually don't have time to show you live on linear tv the ranks package that i was talking about, because it doesn't matter -- but it doesn't matter because surely you are one of the kids that watches online anyway. /rank, go to bloomberg.com you can find all of the sweet ranks packages that we do. and there are a lot more of them than just the candy crush an angry birds thing that we've got on there. that's all for "street smart" today. we have a great show lined up for you tomorrow. low, bonobo, and the corcoran group all joining us tomorrow. have a great tuesday night. ♪
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>> we are coming up on 56 past the hour and that means bloomberg television is on the markets. i'm julie hyman. we did see a rally by the end of the day, although it was not clear we were going to make it there earlier in the session. we were pressed higher by that of an estimated consumer confidence data. if you take a look at what happened with treasuries today as well, we saw a little bit of selling in the treasury market, particularly on the longer end of the curve as the 30 year bond got to 3.5 nine percent. in terms of currencies, the
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currency world got a little smaller today. the irs announced it does not consider bitcoin a currency. instead, it will be treated as property. those taxme to change filings next month. if you do prefer to put the money in the old-fashioned wingback, adam johnson has a reason why this might be the time to buy. -- the good old-fashioned greenback, adam johnson has a reason why this might be the time to buy. >> making the case for the dollar. let me run you through the argument. bullish bad, the weather is behind us. we can see what has happened with all of the bad data. retail sales were a lot less than expected. that is behind us. in theory, you will get an acceleration in the economic data. as you get that, in theory, that should be bullish for the economy and the dollar. argument number two, weakness in asia, which by default suggest you should be here in the u.s.
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instead. in japan, there will be a new sales tax that kicks in in april trying to deal with the long-term budget deficit and debt in japan. meanwhile, we find out that organization is slowing by about 30%. that is bringing people from the farms into the cities. that is bringing the middle class up. that has been the change of paradigm in china. it looks like that is slowing. slowing in asia, by default is bullish in the dollar. booting rush out of the g-8, reducing it back down to the g7, that also argues for being in the u.s. dollar. start to understand why. there are 23 different strategist who follow the dollars are tracked by bloomberg. 21 of them think we are going to go higher. four percent over several months does not come up a lot, but when stocks are kind of flat this year, that one works.
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there is your argument. dollar bulls, this is your moment. quickly we'll see. we will be watching -- >> we will see. we will be watching the dollar. the stake a look at what is happening in commodities, in particular on copper. levels,rom low advancing on concerns that chile, the largest copper producer will be disrupted by protests. china is adding to the bullish mentality. traders are speculative that china may intervene in the market to help ward off slow growth in the world's second-largest economy and the world's biggest consumer of copper. and natural gas also moved up today. that is because, unfortunately for us, winter is not over yet. is national weather service expecting snow for the mid-atlantic and coastal new england areas starting tonight into tomorrow. that is causing the price of the heating fuel used in half of american homes to bounce off of a 10 week low. again, bad for us, but good for
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being long on natural gas. that is it for on the markets. i'm julie hyman. ♪
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>> this is "taking stock" for tuesday, march 25, 2014. i am pimm fox. massar in for pimm fox. theme is an interesting one. we are talking about rush and c rush. handy crash and its game. people see that number and it blows your mind. basically one game that this coy

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